Tribal Advantage 101: Leveraging a Tribes Advantage on Bulk Fuel

If a tribe has not partnered with a wholesale fuel company (like Desert Fuels) that knows how tribes can leverage fuel tax advantages, they can be literally missing out on millions of dollars.

Native Americans, American Indians, and Indigenous people. What is all the fuss about all things Tribal in the United States? What does a wholesale fuel company (and a good one I might add) know about or have anything to do with Native American affairs? Good question… I thought you would never ask.

Native American tribes are governed federally. They are viewed as their own sovereign nation that is outside the jurisdiction of state laws. This means they are only required to adhere to federal laws and not state laws. (Wait for it – the connection to fuel is coming) The largest implication or tribal advantage comes in the form of state taxes that they are exempt from.

Native American Tribes and Bulk Fuel:

The Native American Advantage: Most states charge a state fuel excise tax (on top of the federal $0.184 per gallon on gas) of $0.15 to $0.40 per gallon. This does not apply to tribes. Each state varies in how they interpret when the state fuel excise tax is due, some saying as long as the fuel is sold on tribal land then no tax is due, others say the tax is only exempt if sold to a Native American individual that is registered with a Tribe, while others claim that if the fuel hits a state road that the tax becomes due at that time.

The Challenge: The challenge arises in how to navigate the state laws in such a way that the Tribe can institute their own fuel tax and generate tax revenue for the Tribe instead of the state.

Tribal Expertise: Desert Fuels has worked with more than 20 Tribes across 7 different states, helping them leverage any and all tax advantages available to them. A typical gas station makes, on average, 5-10 cents per gallon by selling fuel at retail. If this number can be increased by $0.20 due to a tax advantage or if the volume can be significantly increased by using this tax advantage to be more aggressive on their street price, the profits generated can easily be in the millions of dollars a year.

States have negotiated many different compacts with Tribes across the nation. These are contracts between the State and the Tribe in which they agree upon how certain tax issues will be handled amongst them since neither has the obligation to work with one another.

If a tribe has not partnered with a wholesale fuel company (like Desert Fuels) that knows how tribes can leverage fuel tax advantages, they can be literally missing out on millions of dollars.

Other Tribal Advantages

Fuel is not the only profit center where tax advantage exists for tribes. Tobacco, sales tax, casino gambling or any other item that is heavily taxed and or regulated by the state is another area where substantial tax savings = large profits for Tribes. The true win for a Tribe comes when they can leverage multiple of these advantages in a synergistic relationship. For example, using the casino point redemption as a means to cross-promote fuel sales in which a tax advantage exists.

Next Steps:

J.J. Mancini is our resident expert on bulk fuel and tribal advantages. Contact Jay for more information and how we can help you.

About the author

Jay Kennedy

Generous, kind, quick witted, analytical, athletic and quite peculiar, Jay Kennedy is to Desert Fuels what the Maraschino cherry is to any dessert, the perfect addition. Jay can quickly analyze a problem or situation and within seconds have a deep understanding and be able to offer insight and meaningful recommendations. This attribute is extremely rare, altogether unique and when partnered with his kindness and frankness creates a powerful “one-two punch” that helps the Desert Fuels team make the best decisions possible. Jay has over 14 years of experience in the fuel industry where he has led a successful fuel company, managed contracts, gained en expertise in indian/tribal fuel, owned gas stations and much more. To say Jay Kennedy is the perfect sized piece to fill in the blanks of the Desert Fuels puzzle, would be an understatement.